World’s First Climate Trade Deal Launched

The announcement of a new US-EU (and potentially global) green steel deal is excellent news. Steel and aluminum are among the biggest carbon emitting industries, and also support good union jobs.

US-EU cooperation to green these industries is a win for the climate and a win for workers.

Importantly, this deal advances on forward challenges while also dealing with the current major one: global excess capacity in the steel sector. Import volumes will be stabilized as the new green policy regime is put into place. Details here: (reuters.com/world/us-eu-ex…)

The pact also makes progress on stronger rules of origin, so that EU steel getting duty-free treatment is truly made in the EU rather than third countries.

The deal is garnering praise from the steel industry, which wants to go all in on greening trade rules. This is an application of the theory @mmildenberger and others have been developing: forward progress on climate requires giving industries reasons to become climate champions

What would those green trade rules for steel look like? Check out this @rooseveltinst report I wrote earlier this year with @Tim_L_Meyer.

If video is more your thing, check out this @trade_review panel with @Tim_L_Meyer, @snlester, and @loyaladvisor for how a Green Steel Deal can advance trade goals.

More details here in a joint US-EU statement.

Key points:

Rather than reach for alignment on precise domestic policy mix internally (US, EU have different approaches), there’s alignment on:

  1. External goal of reducing and discouraging trade in carbon-intensive steel.

Did we just make a major move on 10 percent of global emissions… without even having to go to the Senate?

Yes. Yes we did.

Did we just make a major move on lowering prices for consumers at a time of supply chain crisis?

Yes. Yes we did.

Did we just make a major move on rewarding past, present, and future green investments?

Yes. Yes we did.

Did we just sidestep decades of relative inaction on multilateral trade rules by just… laying out an agenda and inviting the planet on board?

Yes. Yes we did.

Here is our statement @rooseveltinst on this historic deal (rooseveltinstitute.org/2021/10/31/sta…)

Other tidbits from EU’s fact sheet

1. Pause on WTO cases
2. Screening Chinese FDI in steel and aluminum
3. Reupping trade remedy cases against China

Tonal, but doesn’t share the US emphasis on “union jobs” (ec.europa.eu/commission/pre…)

Aaaaand… Here’s the explainer on the green steel deal you need, courtesy of Monkey Cage, Bentley Allan, and myself.

More reporting on the green steel deal, and the implications for acceptance of aggressive, sectoral approaches to decarbonization.

(Adapted from this thread.)

I write about democracy, political economy, and trade. Fellow at the Roosevelt Institute and Roosevelt Forward.